INDIA CHINA Connect

India’s economy faces structural challenges: the trade deficit averaged 6.4% of GDP over the past decade, while manufacturing contributes only 13%. Heavy reliance on energy imports persists, with 85% of crude oil and 50% of natural gas sourced abroad. Defence imports met 38% of procurement needs, and R&D spending remains low at 0.6% of GDP.

China will allow eligible foreign-funded firms to list domestically, revise M&A rules to ease cross-border deals, and permit qualified foreign equity funds in select issuances. These measures aim to boost investor confidence and economic momentum. Mainland stocks rose on the news, while Hong Kong markets declined, reflecting diverging regional investor sentiment.

Forbes’ inaugural “America’s Most Successful Immigrants” list, launched June 10 for the U.S. 250th anniversary, honors 26 Indian Americans excelling in technology, finance, healthcare, media, and philanthropy. Their collective impact spans multibillion-dollar enterprises and global innovation, with leaders including CEOs of Microsoft, Google, Adobe, and IBM.

India led global digital wallet adoption in 2025 with 440+ million app downloads, out of 1.8 billion worldwide. UPI processed 228.5 billion transactions worth $3.15 trillion. PhonePe topped downloads, while Google Pay and PhonePe dominated UPI usage. Young, mobile-first users drove high daily engagement, cementing India’s leadership in digital payments innovation.

India added a record 2.7 GW rooftop solar in Jan–Mar 2026, marking 125% year-on-year growth and lifting nationwide capacity to 23.5 GW. Residential installations drove 82% of additions, with Maharashtra, Uttar Pradesh, and Gujarat leading expansion. The PM Surya Ghar subsidies accelerated household adoption, underscoring strong momentum in India’s renewable energy transition.

Rupee depreciation is raising costs of Chinese imports. Most MSMEs continue trading in US dollars, while yuan adoption remains concentrated among large corporates. Experts argue localisation offers a stronger long-term fix, but economists caution against dependence on another foreign currency, highlighting risks of shifting vulnerabilities in India’s trade and financial ecosystem.

Between 2021–2025, China scrapped or paused 12,200 undergraduate programmes while introducing 10,200 new majors, largely in AI and future industries. Over 30% of courses nationwide were adjusted, with arts, humanities, languages, and management hit hardest. The reforms aim to tackle youth unemployment exceeding 16%, reshaping higher education toward emerging economic needs.

New FEMA amendments effective June 13, 2026, reshape financial rules for NRIs and OCIs. They can now use repatriable rupee accounts for investments, with expanded payment options for NPS contributions. The changes also clarify repatriation rules for sale proceeds and revise bank reporting norms via Form LEC, strengthening compliance and investor flexibility.

Jio plans to deploy 1,600–1,650 LEO satellites at ~650 km altitude, with costs estimated at $10–15 billion. The initiative targets broadband and direct-to-device services, backed by likely government support for ITU orbital filings. This ambitious project could establish India’s sovereign space telecom infrastructure, strengthening its role in global satellite communications.

India’s defence production hit $18.74 billion in FY26, rising 15.6% year-on-year and nearly quadrupling since 2013–14. The FY27 defence budget stands at $82.63 billion, while exports reached $4.04 billion. Private sector firms and startups are reshaping the ecosystem, driving innovation and growth in India’s expanding defence industry.

China’s “Summer Davos” in Dalian highlights its AI ambitions, with the market projected to reach $240.4 billion by 2035. The AI Plus initiative drives cross-sector integration, while 80% of advanced firms cluster in industrial hubs. The 15th Five-Year Plan emphasizes tech self-reliance and strategic industries, reinforcing China’s long-term innovation and economic resilience.